Credit card surcharges

IAAF members should note that from 13 January 2018, businesses will be unable to charge consumers a debit or credit card surcharge in most instances.

EU rules. On 13 January 2018 the Payment Services Regulations 2017 will be amended to enable the requirements of the Second EU Payment Services Directive to be enshrined into UK law. From this date, new provisions in the Regulations will ban businesses from charging retail consumers a debit or credit card fee, or surcharge, in addition to the advertised price of a transaction (in most instances). The UK has also decided to extend this ban to all e-money account transactions, such as PayPal.

Business cards. Whilst there have been reports that state all card surcharges are now banned, this isn’t true. Where a payment is made by a business using a “commercial payment instrument”, the Regulations do not apply. This will include situations where a director or an employee uses a company-issued credit card to make a purchase, e.g. to book travel. In these situations, a surcharge can be applied but it must be limited to a fee not exceeding that incurred by the trader. They must also be able to prove these costs.

Applies to all. There is no small business exemption – the amended Regulations apply to all businesses regardless of their size. That said, certain types of contract are excluded from the Regulations; these include where a consumer is purchasing health, gambling or banking services, immovable property, foodstuffs and certain other goods for household consumption in specified circumstances.

Tip. The government has issued updated guidance on the new rules that apply to surcharges. If you are caught by them, download and read it as soon as possible.

Commercial transactions are not covered by the ban – a surcharge can still be added. However, it must not exceed the actual costs the trader incurs when accepting the payment method.

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